Noonan accused of ‘sleight of hand’ over pensions cap
FINANCE Minister Michael Noonan has been accused of “sleight of hand” over hidden Budget measures that protect the gold-plated pensions of judges, politicians and senior civil servants.
Ordinary private sector workers face new limits on the amount they will have on retirement because of a new super tax of 70 per cent on pensions over €60,000.
But in a barely noticed measure, senior civil servants, including senior members of the judiciary and top local government officials, will be able to retire during the next five years on pensions of up to €115,000 a year which will not be liable for the tax grab back.
Details of the favourable treatment for high-ranking civil servants, judges and politicians were set out in a section of the Finance Bill on Thursday.
But it remained unnoticed until it was revealed in yesterday's Irish Independent.
Earlier this year, sources in the judiciary made it clear that a large number of senior judges would quit the bench before January next if a 70 per cent super tax was applied to them.
In May, the Department of Finance wrote to the Attorney General, inviting judges to make submissions on the proposed tax relief cap on pensions.
Fears of an exodus from the judiciary may have played a role in Michael Noonan's decision to alter his plans. It means there is now effectively a two-tier tax system on pensions — with the biggest earners in the State sector getting favourable treatment.
President of the Irish Brokers Association John Bissett told Mr Noonan at a conference that the changes amounted to discrimination and inequality. He said public sector workers were already paid 50 per cent more than those in the private sector.
“The pension cap does not address this issue, as it will take another 40 years to apply in full.
“Senior civil servants who retire in the next five years can receive a pension of up to €115,000 per annum, whereas private-sector workers in defined contribution schemes are capped at €60,000,” he said at the Irish Brokers Association annual lunch.